A Business Just Like Any Other

What is the purpose of starting a business? To make profit.

Most businesses spend more money than they make that’s why they go belly up.

So why should network marketing be any different?

The common belief is that network marketing is a business that appreciates in value over time. In other words, if I have a group of 100 to 1,000 people under me buying the product and recruiting more, I’d be getting richer and richer! But we all know that.

It is not the pot of gold at the end of the rainbow. It’s SURVIVING the first 6 months to 2 years!

It is common that most network marketers in a new industry typically go through a 6 months trial and error period, therefore, it is crucial to ensure that during those 6 training months, you manage your cash wisely so you can learn and make money at the same time.

Just like in normal business, most of them fail within their first 2 years of operation and struggle to make profit even if they do survive. The key to survival is CASH FLOW

In other words, it can be summed up in this equation:

Cash today, downline tomorrow.

People in network marketing usually run out of cash flow normally after 3 months and they quit because they spend more as they build. But by breaking even as fast as possible, it gives tremendous mental strength to the distributor and he or she is less likely to drop out.

First, we must understand the mindset which is the most important starting point in getting by the first 3 months.

Debt Free Network Marketing

“Strategies On How to Erase Costs While Building Your Network Giving You Endless Leads and Cash Flow!” FreeEboooks.com

The Mindset of a Business Builder

(Don’t proceed any further in this book until you ingrain these into your brain!)

· It takes TIME to build a successful business. If you make ANY money in the first few months (even if it is just a few dollars) it is PERFECTLY NORMAL.

· It is MY BUSINESS. Not my upline’s business or my downline’s business. Everything depends on ME putting effort to succeed.

· Invest in TOOLS that brings in revenue (lead generators, viral e-books, generic information, etc). Don’t buy books and tapes just for the sake of buying them.

· Don’t use your own money if possible. Most successful businessmen use other people’s money (borrowed money either from relatives or financial institutions) to build their business. Remember that cash flow is more important than revenue

· Don’t blow all your money on advertising that doesn’t bring in cash flow as well. Direct response advertising is one of the most effective ways.

· A smart businessman doesn’t spread himself out too much Build the LOCAL market first. Never venture outstation unless you have a steady income. If you can’t even take care of yourself, how can you take care of your downline far away from you?

· Focus on solving other people’s problems. Don’t recruit people just for the sake of recruiting them. Try and understand what problems they are going through first.

· Enjoying the journey! People who love their job always outperform those who do it grudgingly. If your prospect sees you doing your business so grudgingly, will they join you?

Typical MLM cash flow

Only

Depending on the network marketing company, do you see how typical it is for an average builder to spend somewhere between $1,000 to $16,000 as a STARTING INVESTMENT? You can estimate how much you have to make in the long run then only will you break even. But let us see how we can minimize these overheads to generate more cash flow.

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“Strategies

What is Your Profit Margin?

One of the key strategies to generate more cash flow is relating to your COMPENSATION PLAN.

Different plans may differ from company to company. Some companies may boast of their high payout. They will say something like this:

Our company is the best because we pay out 75% of our commission to all the distributors! It is like saying for every $100 sale; $75 is paid back to our people. You will never fail with this company!

I urge you to make intelligent financial decisions and NOT emotional decisions because responding to emotional appeal can cause a lot of heartaches in the future.

I can’t cover all the mechanics on plans, but it is better to refer to the book series called Show me The Plan! Where I will explain more in depth about marketing plan mechanics. But for the purpose of this topic, I will list down some principles (marketing plan related) to follow.

· Don’t look at the total payout of the company; look at the first 2 levels of payout: How much you get for recruiting someone, and how much you get if THEY recruit someone. It is no point dreaming how much you make as a ‘Rainbow Diamond Leader’ if you can’t even succeed at the lower levels

· Examine how much you have to spend to RECRUIT someone. Some companies require you to either pay for their training program first, or require you to accompany them into the training session (and you have to pay your own way)

· If you have little cash flow but wish to join a company that requires a large inventory investment but high profit margin, make sure those products can be used to SPONSOR your downline so you can recuperate as much cash as possible

· Can you afford the auto-ship?

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Downline: An Asset or Liability?

What is the income you are expecting from your business? Do you know that you have to invest time and money in your downlines? Yes, it is true that you make money when your downline joins you or makes a sale, but most of the time, to build a long term business; you have to invest heavily in their education.

Network Marketing is a business of duplication and although many people will pay the price to build their network, you must be very selective of whom you spend your time with. You can’t possible be everything to everyone and you must select who are the people that you are going places with!

It makes sense because they time you spend with one means time where you could either be developing another or recruiting a new distributor. Furthermore, you have to drive out of your house to see them or accompany them in training and counseling sessions.

Are you prepared to pay the price for ‘this guy’?

Most of the time many people quit network marketing is not because they can’t recruit, but because they spend too much time with a recruit thinking they can change a duck into an eagle. You quack with ducks but soar with eagles, if I am not mistaken. So if you spend too much time with a duck that quacks a lot but doesn’t do anything else, you have no choice but to leave him behind if you need to soar with the eagles (or else you will be like the ‘duck’ as well).

The key point to remember is this:

If you are doing 99% of the work in your network while the rest is doing 1%: START FINDING NEW DOWNLINES, They will spend less of your money (and free up your time to make more).

In the next few chapters, I will show you how by erasing some of the expenditures on Network Marketing, you and all your downlines can save time and money (so your downlines will not quit easily due to lack of cash flow and your business will survive better in the earlier stages).

Debt Free Network Marketing

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